Florida Governor Ron DeSantis has made “holding woke corporations accountable” a central theme of his presidential campaign, specifically targeting Disney. DeSantis has accused the company of promoting sexualized content for children, stating that he will not tolerate it. This stance has been reiterated at campaign events throughout the country, including in New Hampshire, South Carolina, Oklahoma, and Iowa.
The conflict between DeSantis and Disney began last year when Disney opposed a controversial education law known as “Don’t Say Gay.” DeSantis has proudly spoken about retaliating against the company for its opposition. Although Disney remains a powerful brand globally, its public reputation has been impacted, and it now faces the possibility of continued attacks from DeSantis for the next several years.
Throughout its 100-year history, Disney has strived to avoid political and cultural controversies in order to protect its wholesome image. Being dragged into a presidential campaign is the last thing the company desires. However, engaging with DeSantis in a public rebuttal would likely exacerbate the situation. A recent poll suggests that many Americans are not paying enough attention to form an opinion on the matter, so it may not be worthwhile for Disney to risk further negative publicity.
Despite the political battle, analysts do not anticipate any significant impact on Disney’s overall business as long as attendance at its theme parks remains stable. However, the company’s reputation has taken a hit, and it now ranks as the fifth-most-polarizing brand in America, according to the Axios Harris Poll. Disney’s intangible value, including trust, citizenship, ethics, and growth potential, has also suffered.
Disney executives privately question polls showing brand erosion but are taking steps to safeguard the company’s reputation. They have appointed a chief brand officer and subtly exerted pressure on DeSantis. For example, Disney’s CEO, Robert Iger, was photographed with California Governor Gavin Newsom at Disneyland, highlighting a project that had been halted in Florida. Newsom also attended Disneyland’s Pride Nite, indirectly addressing DeSantis’ accusations.
The challenge for Disney lies in the nature of political campaigns, where sound bites can spread quickly. DeSantis has accused the company of “sexualizing children,” while Disney stated that their opposition to the education law was motivated by concerns for LGBTQ+ children and families. A television advertisement falsely suggesting Disney’s involvement in brainwashing children further fueled the controversy.
Outside of public perception issues, Disney is also contending with challenges like poor box office results, a screenwriters’ strike, and the departure of its CFO. Investors are becoming restless, and Disney shares have experienced a decline. The traditional television sector, including ESPN, which has been Disney’s main profit generator, has been significantly impacted by cord-cutting and rising programming costs. The company is betting on its streaming services to drive growth, but Disney+ has been losing subscribers, and the streaming division overall remains unprofitable.
To navigate these challenges, Disney is implementing cost-cutting measures, which include reducing its workforce by 7,000 employees and making layoffs at Pixar and ESPN. Additionally, the company is facing uncertainty over who will succeed Bob Chapek as CEO when his contract expires in 2024. Chapek’s response to the Florida education law was met with employee backlash, prompting Disney to sue DeSantis and halt projects in the state, ultimately leading to the ongoing legal battle.
Disney’s lawsuit against DeSantis is progressing, but resolution may take years. In the meantime, the political feud continues to capture headlines. Disney has proposed a trial start date in its lawsuit for July 15, 2024, coinciding with the beginning of the Republican National Convention.
In conclusion, Governor Ron DeSantis’ attacks on Disney have created reputational challenges for the company. Nonetheless, analysts believe that Disney’s overall business will remain unaffected as long as its theme park attendance remains steady. However, the company recognizes the importance of proactively safeguarding its reputation. Despite the obstacles, Disney is hopeful that its streaming services will drive future growth. With ongoing legal battles, leadership uncertainties, and a changing media landscape, Disney finds itself navigating rough waters in these politically charged times.
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